The $3.99 trillion latest budget is available from the White House, and once again it is time to put on your rose-colored glasses.
For the uninitiated, every year the President via the Office of Management and Budget is required to present his budget to Congress for consideration. Inside, one can find the administration’s views of everything from where the economy is going to how much debt the nation will take on.
So far, every single year Barack Obama has been in office, his budgets have consistently overstated how well the economy would do.
Take 2014 as a prime example. The White House projected 3.1 percent growth. Instead, the economy only grew at a tepid 2.4 percent.
In 2009, similarly, Obama’s crack team grossly underestimated how deep the recession would be — and more critically, how rapidly the recovery would ensue. That year, Obama thought the economy would only contract by 1.2 percent. Instead, it went down by 3.1 percent under the Bureau of Economic Analysis’ then-used method for measuring the Gross Domestic Product (GDP), which was modified in 2012.
Further, in 2010 there would be 3.2 percent growth, 2011 at 4.0 percent growth, and 2012 at 4.6 percent growth. Whoops. It was only 2.7 percent, 1.8 percent, and 2.2 percent respectively.
By now, interest rates were supposed to have normalized to 5.2 percent on 10-year treasuries. Instead, those stand at about 1.7 percent, reflecting the poor state of the global economy and general low demand for credit.
The unemployment rate was supposed to be 5 percent, yet it is still at 5.6 percent, even though almost 7 million people under the age of 65 have left the civilian labor force since the beginning of 2009, according to the Bureau of Labor Statistics.
All told, Obama has overstated current year GDP by 4.4 percentage points since 2009 — or what in actuality has been two years of growth on his watch.
None of this is good news. In fact, the economy has not grown above 3 percent since 2005, and not above 4 percent since the year 2000.
Yet, we have an administration that continues to propose spending well in excess of what is taken in via revenue, based upon economic assumptions that have proven overly optimistic year in and year out.
The truth is, just looking at the past 30 years, if both the national debt — now at $18 trillion — and the economy continue growing nominally at the rates they have been, at 8.5 and 5.1 percent, respectively, by 2045 the national debt will be $227.6 trillion, and the economy will only be $80.7 trillion.
That’s a debt to GDP ratio of 282 percent. Yikes. At that point, our only respite might be lower interest rates.
And yet, Obama has the gall to tell the American people that, “I’m proud of saving the American economy. And we still have a long way to go,” in a February 1 interview with Fareed Zakaria on CNN.
Apparently, when it comes to the budget and the economy, there’s Obama, and then there’s reality.
Robert Romano is the senior editor of Americans for Limited Government.
